Have you sold a home in the last few years where your buyers put down less than 20% and are paying Private Mortgage Insurance (PMI)? If so, this is a great time to reconnect with them. Buyers pay approximately $30-$70 per month in PMI per $100K borrowed. Help them lower their mortgage payment by removing this PMI payment and stay in FLOW with your sphere.
There are several ways to remove a PMI payment. The most common is through the Homeowners Protection Act (PMI Cancellation Act). When the principal balance is scheduled to reach 78% of the ORIGINAL value, the PMI is automatically removed. The same Act also says that the homeowner can initiate PMI removal if they hit 80% LTV ahead of schedule by making additional payments.
Here’s where an agent adds value. As a market professional, you are more aware of market value increases. In 2021 alone, median prices increased 11.1% in Illinois per data released by Illinois REALTORS®. In some areas, home values increased as much as 30%! Work with your Key Mortgage loan officer, to review your buyers over the past several years to determine who put less than 20% down and what the value of the home would need to be to meet the threshold.
The borrower will likely need to submit a written request to remove PMI and an appraisal may be necessary. If all else fails, your client can determine if refinancing is a better option with a lower payment – or possibly, they will be so excited about their property value increase that they might consider selling. In any case, you are showing them you have their best interest at heart (and want to save them money) — even after they leave the closing table.
Reach out to a Key Mortgage LO today — even if Key didn’t provide the original loan — to learn more about helping your buyers remove PMI.